Ibovespa was trading on an improvement on Monday, after falling more than 1% earlier in the day, in an early reaction to concerns about the potential fallout from the Silicon Valley Bank (SVB) collapse, which made regulators in US take action at the end of the week to boost confidence in the banking system.
In Brazil, attention remains on the new tax rule, which could be known in the coming days. Finance Minister Fernando Haddad said on Monday that he plans to present the new framework to President Luiz Inacio Lula da Silva and Vice President Geraldo Alckmin this week.
At 00:03, the Ibovespa was up 0.19% to 103,818.57 points. In the worst case scenario, it fell 1.3% to 102,254.72 points. The financial volume amounted to 6.7 billion reais.
Ibovespa closed the day down 1.38% to 103,618.2 points on Friday when it announced the liquidation of North American startup-focused SVB.
On Sunday, the Federal Reserve, the US Treasury and the Federal Deposit Insurance Corp (FDIC) launched emergency measures to boost confidence in the US banking system, including that SVB customers will have access to all their deposits at starting this Monday.
A new tool has been created to give banks access to emergency funds, and the Fed has also made it easier for banks to borrow in an emergency.
“The situation is still evolving and calls for caution in the coming days and weeks,” said Dan H. Kawa, chief investment officer at TAG Investimentos, calling attention to the Fed’s “complicated situation” right now.
Even with high inflation, he said, the US central bank needed to implement a measure that should inject liquidity into the economy, making its job of fighting rising prices all the more challenging.
Kawa said he still sees a 25 percentage point hike in US interest rates this month, but ponders whether February’s consumer price index (CPI) out Tuesday will determine whether or not there is a rate hike basic in the short term.
In statements to the US Congress last week, Fed Chairman Jerome Powell left the door open for broader and faster monetary tightening in the US.
In New York, the S&P 500 is also improving, albeit volatile, up 0.65% at this point.
According to the XP Ivestimentos team, despite the measures implemented by the regulators, the market remains concerned about systemic and liquidity risk in the banking system.
For Kawa, the effects of the collapse of the SVB in Brazil should be secondary, more concentrated in the price and short-term dynamics of risky assets. “I see the situation and the background of the banking system in the country very different from what you see in the United States,” she added in a commentary to clients.
LOCAL MARKET
In the domestic scenario, in addition to the tax rule, XP highlighted that the market is also waiting for the two names that the government will appoint for the central bank board, with the investment platform team assessing that there is a “great possibility” of both were disclosed this week.
“They are essential for signaling the direction of fiscal and monetary policy in the Lula government,” he stressed. The directors of Monetary Policy, Bruno Serra, and of Inspection, Paulo Souza, are about to expire.
In an event on Monday, Haddad said that Lula will name the technical names of central bank directors and that he should make a decision in the next few days.
HIGHLIGHTS
– ITAÚ UNIBANCO PN fell by 0.5%, to 23.95 reais, and BRADESCO PN lost 0.66%, to 13.48 reais, in a context that is still difficult for credit in Brazil and with some contagion due to news involving the SVB in the United States. BANCO DO BRASIL ON had a positive variation of 0.16%, to 38.45 reais, and SANTANDER BRASIL UNIT recorded a decrease of 1.2%, to 26.3 reais.
– VIA ON advanced by 12.64%, to 2.05 reais, in an adjustment session, after closing more than 6% down last Friday, while MAGAZINE LUIZA ON recorded an increase of 8.53% , at 3.69 reais, continuing the recovery that began in the last trading session, after the stock fell to 11.5% in the worst moment on Friday.
– 3R PETROLEUM ON fell by 4.6% to 27.58 reais, while PRIO ON fell by 2.08% to 32.52 reais, due to the drop in oil prices abroad. PETROBRAS PN showed a low of 0.6%, at 24.83 reais.
– VALE ON rose 0.87% to 85.44 reais, as iron ore futures contract prices increased in China and Singapore. In the mining and steel sector, CSN ON appreciated by 1.57%, to 16.17 reais.
Source: Terra
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